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Trump order directs banks to weigh customer citizenship status
By Aurax Desk | May 20, 2026 | 2 min read
A new executive order from President Donald Trump directs U.S. regulators to update banking oversight rules to incorporate customer immigration status as part of financial risk assessments. The move stops short of requiring banks to formally collect citizenship data but expands scrutiny of non-citizen account holders.
U.S. banks face updated federal guidance on customer vetting rules.
President Donald Trump has issued an executive order instructing financial regulators to revise anti-money-laundering and “know your customer” rules so that banks consider immigration status when evaluating account risk. The directive is part of a broader effort by the administration to tighten oversight of financial activity linked to undocumented immigrants and related compliance concerns.
The order does not immediately mandate that banks collect citizenship or passport data from customers, but it instructs the Treasury Department to develop guidance that could increase documentation requirements in the future. Officials say the changes are intended to strengthen detection of illicit financial activity, including fraud, tax evasion and money laundering.
Financial institutions may increase scrutiny of customer identification under new federal rules.
Reports indicate the policy reflects a shift from earlier, more expansive proposals that would have required banks to gather citizenship information from all clients. Financial industry groups previously warned that such requirements could be costly and difficult to implement, particularly for existing account holders.
The measure adds to a series of immigration-related policy changes affecting financial and regulatory systems. It also follows ongoing debate over how far banks should go in verifying customer eligibility to access services traditionally open to both citizens and non-citizens.
Analysts say the updated guidance could still lead to increased scrutiny for non-citizen customers, even without a formal requirement to collect citizenship documentation at account opening.
Sources: Reporting from The Wall Street Journal, Reuters, and Bloomberg.
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